VINGROUP JSC (VIC)

26 April 2012

AGM Note

18 March 2011
Phuong Ton Senior Analyst Phuong.Ton@vcsc.com.vn +84 8 3 914 3588 ext. 146

VIC: 2012 targets in hand

The AGM on 25 April 2012 set targets including a revenue of VND12,364 billion and a net profit after tax of VND3,055 billion. Specifically, the revenue target represents an increase of 258% over pro-forma results of the combined Vincom and Vinpearl in 2011. The majority of the target will come from the recognition of Vincom Village project. In our estimates, the breakdown of the revenue stream should distribute as follows: Vincom Village (71%), Vinpearl (8%), leasing activities of Vincom properties (10%) and sale of Tower B Vincom Center Hanoi (11%). We believe the target is, to a large extent, achievable. This recognition of Vincom Village would represent approximately 60% of the 38.2ha villa sale to secondary developers that already took place in 2011. Our site visit in mid April indicated that construction has been largely completed, the land transfer should be in line with commitment and there should be no problem in the recognition of the sale. On the other hand, the proportion of 2012 revenue target coming from Vinpearl and Vincom leasing activities would only require an operational scale similar to that in 2011. 2013 to be break out year. Looking forward into 2013, we believe it would be a year of sharp rise in revenue and net profit for VIC when we expect the other 40% of Vincom Village villa sale, the majority of Royal City and Vinpearl Da Nang and Hoi An projects become recognizable. Upsize of CBs expanded to US$115 million, exercise date extended to 10 July 2012. On the financing end, VIC has also approved to extend the size of the 5 year international convertible bonds issued in April by US$50 million to US$300 million, leaving the US$115 million upsize to be exercisable until 10 July 2012. The addition of US$50 million upsize is in response to expressed interest from investors and will carry the same conditions as the first closing successful bid amount of US$185 million issued in early April. For conditions of the US$185 million convertible bond issued, please refer to VCSCs CB issuance note on VIC dated 06 April 2012. In order to comply with maximum foreign room limit by law (49%), VIC has also approved to put in reserve 22.9% of the maximum foreign room at any specific time for the CB conversion (22.9% is the percentage ownership represented by the CB in case 100% of the US$300 million will be converted). Effectively, this means before the first CB conversion, VICs maximum foreign room will be reduced to 37.78% instead of 49%. The company will pay stock dividend at the ratio of 1000:275, of which 1000:124 is 2011 dividend and 1000:151 is advance for 2012 dividend. The estimated time for the stock issue is Q2 of 2012. After the issuance, charter capital of the company will be increased to VND7,005 billion. VND12,500bn in cash flows expected in 2012. We estimate VIC to be able to collect approximately a total of VND12,500 billion from its 3 core real estate projects, including VND7,000 billion (40% of total estimated value) from Vincom Village, VND2,500 billion (30% total estimated value) from Times City and VND3,000 (30% total estimated value) from Royal City. The company will also have the regular cash streams from leasing activities of the Vincom Centers and Vinpearl resorts of about VND2,000 billion.

NON RATED Target price Upside

Real estate
Key Indicators Price @ 26 April 2012 52-week low 52-week high Avg. 30 day trading volume Outstanding shares (mn) Market capitalization (VND bn) Market capitalization (USD mn) Foreign ownership Valuation EPS (basic) EPS growth % P/E at market P/B at market EV / EBITDA ROE ROA ROIC Debt-to-equity Performance Absolute % Relative %
10% 5% 0% -5% -10% -15% -20% -25% -30% -35% -40%

NA NA

100,000 80,000 137,000 230,166 549 54,938 2,616 11%

2009 2010 2011 5,623 8,063 2,151 350.8% 43.4% -73.3% 17.8x 12.4x 46.5x 7.7x 4.2x 5.9x 11.4x 11.1x 21.7x 41.9% 36.9% 12.1% 10.8% 12.0% 3.5% 12.0% 14.3% 5.5% 254.6% 120.2% 121.6% 3M -6.5% -8.9% 6M 10.5% -5.0% 12M -21.9% -22.1%

10/2011

11/2011

12/2011

4/2011

5/2011

6/2011

7/2011

8/2011

9/2011

1/2012

2/2012

VIC

VNIndex

Ownership Structure Mr. Vuong (direct & indirect) Vingroup ( Sinh Thai JSC Foreign

56.64% 14.32% 9.05% 11.16%

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3/2012

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VINGROUP JSC (VIC)

18 March 2011

AGM Note

Pictures taken at Vincom Village in April 2012

Figure 1: Hoa Phuong Area

Figure 2: Bang Lang Area

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18 March 2011
Analyst Certification

AGM Note

I, Phuong Ton, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues, which include revenues from, among other business units, Institutional Equities and Investment Banking. VCSC Rating System and Valuation Methodology Absolute performance, long term (fundamental) rating key: The recommendation is based on implied absolute upside/downside for the stock from the target price, defined as (target price current price)/current price, and is not related to market performance. This structure applies from 1 November 2010. Equity rating key BUY ADD HOLD REDUCE SELL NOT RATED Definition If the target price is 20% higher than the market price If the target price is 10-20% higher than the market price If the target price is 10% below or 10% above the market price If the target price is 10-20% lower than the market price If the target price is 20% lower than the market price The company is or may be covered by the Research Department but no rating or target price is assigned either voluntarily or to comply with applicable regulation and/or firm policies in certain circumstances, including when VCSC is acting in an advisory capacity in a merger or strategic transaction involving the company. The investment rating and target price for this stock have been suspended as there is not a sufficient fundamental basis for determining an investment rating or target. The previous investment rating and target price, if any, are no longer in effect for this stock.

RATING SUSPENDED

Unless otherwise specified, these performance parameters only reflect capital appreciation and are set with a 12month horizon. Future price volatility may cause temporary mismatch between upside/downside for a stock based on market price and the formal recommendation, thus these performance parameters should be interpreted flexibly. Small Cap Research: VCSC Research covers companies with a market capitalisation of up to USD50mn, inclusively. Clients should note that coverage may not be consistent and that VCSC may drop coverage of small caps at any time without notice. Target price: In most cases, the target price will equal the analyst's assessment of the current fair value of the stock. The target price is the level the stock should currently trade at if the market were to accept the analyst's view of the stock, provided the necessary catalysts were in place to effect this change in perception within the performance horizon. However, if the analyst doesn't think the market will reassess the stock over the specified time horizon due to a lack of events or catalysts, then the target price may differ from fair value. In most cases, therefore, our recommendation is an assessment of the mismatch between current market price and our assessment of current fair value. Valuation Methodology: To derive the target price, the analyst may use different valuation methods, including, but not limited to, discounted free cash-flow and comparative analysis. The selection of methods depends on the industry, the company, the nature of the stock and other circumstances. Company valuations are based on a single or a combination of one of the following valuation methods: 1) Multiple-based models (P/E, P/cash flow, EV/sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer-group comparisons, and historical valuation approaches; 2) Discount models (DCF, DVMA, DDM); 3) Break-up value approaches or asset-based evaluation methods; and 4) Economic profit approaches (Residual Income, EVA). Valuation models are dependent on macroeconomic factors, such as GDP growth, interest rates, exchange rates, raw materials, on other assumptions about the economy, as well as risks inherent to the company under review. Furthermore, market sentiment may affect the valuation of companies. Valuations are also based on expectations that might change rapidly and without notice, depending on developments specific to individual industries. Risks: Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related instrument mentioned in this report. For investment advice, trade execution or other enquiries, clients should contact their local sales representative.

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18 March 2011

AGM Note

Contacts
Head office 67 Ham Nghi, District 1, HCMC +84 8 3914 3588 Transaction office 136 Ham Nghi, District 1, HCMC +84 8 3914 3588 Hanoi branch 109 Tran Hung Dao, Hoan Kiem District, Hanoi +84 4 6262 6999 Transaction office 236 - 238 Nguyen Cong Tru, District 1, HCMC +84 8 3914 3588

Research
Acting Head of Research Mr. Tu Vu, ext 105 tu.vu@vcsc.com.vn Senior Macro Analyst, Ms. Hoai Doan, ext 139 Senior Analyst, Ms. Hoa Dinh, ext 140 Senior Analyst, Ms. Phuong Ton, ext 146 Senior Analyst, Ms. Giang Hoang, ext 142 Research Team +84 8 3914 3588 research@vcsc.com.vn Analyst, Ms. Ly Vu, ext 147 Analyst, Mr. Viet Vu, ext 143 Analyst, Mr. Phong Nguyen, ext 120 Analyst, Ms. Duong Pham, ext 130 Analyst, Ms. Chi Luong, ext 145

Institutional Sales & Brokerage

& Foreign Individuals Head of Institutional Sales Michel Tosto, M.Sc. +84 8 3914 3588, ext 102 michel.tosto@vcsc.com.vn Japanese Sales Tran Minh Hue +84 8 3914 3588, ext 122 hue.tran@vcsc.com.vn Vietnamese Sales Nguyen Quoc Dung +84 8 3914 3588, ext 136 dung.nguyen@vcsc.com.vn

Retail & Corporate Sales & Brokerage

Ho Chi Minh City Quynh Chau +84 8 3914 3588, ext 222 quynh.chau@vcsc.com.vn Hanoi Quang Nguyen +84 4 6262 6999, ext 312 quang.nguyen@vcsc.com.vn

Disclaimer
Copyright 2012 Viet Capital Securities Company. All rights reserved. This report has been prepared on the basis of information believed to be reliable at the time of publication. VCSC makes no representation or warranty regarding the completeness and accuracy of such information. Opinions, estimates and projection expressed in this report represent the current views of the author at the date of publication only. They do not necessarily reflect the opinions of VCSC and are subject to change without notice. This report is provided, for information purposes only, to institutional investor and retail clients of VCSC, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction. Investors must make their investment decisions based upon independent advice subject to their particular financial situation and investment objectives. This report may not be copied, reproduced, published or redistributed by any person for any purpose without the written permission of an authorized representative of VCSC. Please cite sources when quoting.
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